Home Equity Loan Calculator
Equity & Loan Details
Home Equity Results
| Monthly Payment | — |
|---|---|
| Total of 180 loan payments | — |
| Total Interest | — |
Visual Breakdown
Enter values and press Calculate to see the loan breakdown pie chart and balance path line chart.
How to Use This Home Equity Loan Calculator
A home equity loan gives you a lump sum at closing—useful for a kitchen remodel, debt consolidation, or tuition—and then you pay it back on a fixed schedule like a second mortgage. Lenders quote rates and terms, but the monthly number is not always obvious until you sit down with the paperwork. Enter your figures here and see the payment, total interest, and amortization path before you commit.
- Enter the loan amount. This is the lump sum you plan to borrow, not your home's total equity. Confirm with your lender that the amount fits their combined loan-to-value limits.
- Set interest rate and term. Home equity loans commonly run 10 to 20 years; the default is 15 years at 8% APR as a sample.
- Optionally include closing costs. Check the box to add origination or title fees as a dollar amount or percentage. Choose whether fees are deducted from loan proceeds or paid upfront—financed fees affect the displayed APR.
- Press Calculate. Review monthly payment, total interest, optional APR with fees, charts, and the full amortization schedule.
Prefer a revolving line instead of a lump sum? Try the HELOC Calculator. For your first mortgage payment, use the Mortgage Calculator.
Home Equity Loan Formulas and Practical Applications
Home equity is the gap between what your home is worth and what you still owe on the first mortgage—like the paid-off portion of a layaway plan. A home equity loan converts part of that stake into cash today while your house stays collateral for both loans.
Fixed monthly payment
This tool models a level-payment fixed-rate second mortgage. Given loan amount P, monthly rate i, and term n months:
M = P × [ i(1 + i)ⁿ ] / [ (1 + i)ⁿ − 1 ]
A $150,000 loan at 8% over 15 years (n = 180) produces a payment of about $1,432 per month. Total interest over the life of the loan runs roughly $108,000—worth weighing against shorter terms if cash flow allows.
Closing costs and APR adjustment
When you enable closing costs, the calculator can treat fees two ways. If deducted from proceeds, you still owe the full loan amount but received less cash—similar to how APR works on a first mortgage. The tool solves for an adjusted APR that reflects financed fees. If paid upfront, the payment math stays on the stated loan amount, but total cost includes the cash you spent at closing.
How much can you actually borrow?
Lenders typically limit combined borrowing to 80% to 85% of appraised value. In practical terms:
Max Combined Debt = Home Value × LTV Limit
Available Equity Loan = Max Combined Debt − First Mortgage Balance
On a $500,000 home with a $320,000 first mortgage and an 85% combined limit, you could borrow up to $105,000 ($425,000 − $320,000). Enter that figure here to see the payment—this page does not look up your home value automatically.
Frequently Asked Questions
What is the difference between a home equity loan and a HELOC?
A home equity loan is a fixed lump sum with fixed payments—like a second mortgage. A HELOC is a revolving line you draw from as needed with variable rates and two payment phases.
How are home equity loan payments calculated?
Payments use standard fixed-rate amortization: the loan amount, APR, and term determine a level monthly payment of principal plus interest over the full term.
Should I include closing costs in the calculation?
If your lender charges origination or title fees, check Include closing costs. You can enter a dollar amount or percentage and choose whether fees are deducted from proceeds or paid upfront—the tool adjusts APR when fees are financed.
What LTV do lenders allow on home equity loans?
Most lenders cap combined loan-to-value around 80% to 85% of appraised value minus your first mortgage balance. This calculator models payments on the amount you enter—it does not estimate your maximum borrowable equity.
Is interest on a home equity loan tax-deductible?
Deduction rules depend on how you use the funds and current IRS guidelines. Consult a tax professional—this calculator does not model tax effects.